Merck & Company, the third-largest drug maker in the United States, is escaping liability for the adverse side effects that Vioxx caused thousands of patients. As published in The New York Times, Merck has forced every claim to be tried on a case-by-case basis, not allowing for plaintiffs to aggregate their claims. So far courts have agreed with Merck that because each plaintiff’s claim is based on a separate set of facts (specific to that particular plaintiff), the claims should not be aggregated. However, how fair is this to the plaintiffs?

Vioxx was withdrawn from the market in 2004 because it was found that patients who had taken the drug for 18 months or more were suffering heart attacks. Scientists say that over 20 million Americans have taken Vioxx and that approximately 100,000 have suffered heart attacks. Merck said “it had adequately warned patients and doctors of Vioxx’s heart risks an that it never knowingly endangered patients.” However, counsel for the drug maker, Theodore V.H. Mayer, partner at Hughes Hubbard & Reed contends that there is not one case yet that he has tried where Vioxx caused a heart attack, simply because they are a very common occurrence. If Merck admitted that Vioxx can cause heart attacks, then why is it’s counsel against settling the cases?

So far over 45,000 claims have been filed against Merck, but less than 20 cases have actually made it to a jury. Most of the cases are in the pretrial discovery phase where Merck’s lawyers are investigating into the amount of Vioxx taken by the plaintiffs, how long they took it for, when they suffered a heart attack, how close to suffering the heart attack were they taking the drug, etc. Many plaintiffs’ lawyers are discouraged from pursuing their claims against Merck because of a lack of sufficient evidence regarding the taking of the medicine and the suffering of the heart attack. So far Merck has won most of the cases that have gone to trial and the ones it lost it has appealed.

Merck’s tactics are discouraging to plaintiffs because most of them will never see their day in court. There are no settlement opportunities available to the plaintiffs and because of the sheer volume of cases, many of the plaintiffs will probably die before their case is heard. One attorney, Mr. Lanier, who represented Carol Ernst in a case against Merck in 2005, says, “Merck’s goal is to manipulate the legal system to deprive justice to tens of thousands of people whose cases can never be heard.” That seems to be just what Merck is doing. Even though Ernst won her case against Merck and was awarded $253.5 million, the drug maker appealed the ruling and had the damages lowered to $26.1 million.

In total, Merck has spent over $1 billion in the last three years in legal fees which, unfortunately enough for the plaintiffs, has seemed to help Merck out tremendously. Not only are the number of claims against Merck decreasing, but so too is the total amount of liability, down to $5 billion from a previously estimated $25 billion. The victims in this whole scheme are the plaintiffs who not only suffered adverse effects from taking Vioxx, but who—for the majority—will never get a chance to face Merck in court. For those few who might bring their case and win, such as Ernst, victory is bittersweet because it will be years before any compensation is even paid out (it is estimated that the earliest Ernst might see any compensation is in 2008).

To read the full New York Times article, click on the link below:

“Plaintiffs Find Payday Elusive in Vioxx Cases”

Many news sources have published articles regarding Amgen’s recent announcement that it will undergo restructuring due to declining sales of two of its blockbuster drugs, anemia drugs Aranesp and Epogen. Included in the restructuring is, first, a 12% to 14% cut in the company’s workforce of 20,000, which is a loss of 2,200 to 2,600 employees. Next, capital expenditures will be reduced by about $1.9 million between 2007 and 2008. Further, certain operations facilities will be closed down while others will be reduced in size for efficiency purposes. Also, the adjusted earnings per share guidance has been lowered to between $4.13 and $4.23 per share from previously estimated $4.28 per share. Restructuring pre tax charges are estimated between $600 million and $700 million for 2007 and 2008, but the restructuring plans implemented by Amgen are estimated to save the company between $1 billion and $1.3 billion next year.

Amgen, founded in 1980, has seen a steady increase in sales and profits since Epogen was introduced into the market in 1989. This plan for restructuring is the first one of its kind that Amgen has experienced in its 27-year history as a biotechnology company. The company has grown to employ 20,000 employees worldwide, with 11 of its facilities located in some of the biggest cities in the U.S., including San Francisco, CA; Cambridge, MA; and Seattle, WA. The restructuring plans come in the wake of “payment limits by insurers and safety warnings from U.S. regulators.” FDA approved labels for Amgen’s drugs have undergone changes including the inclusion of a “black box” warning. These warnings coupled with numerous studies into the safety of the drugs have adversely affected Amgen’s anemia drug sales, which have, in turn, caused the company’s restructuring.

Click on the following links to read the full version of the articles which have contributed to this post:

Associated Press (in Forbes): “Amgen to Cut Up to 2,600 Jobs”

Bloomberg: “Amgen Will Cut 2,200 to 2,600 Jobs, Saving $1 Billion”

The New York Times: “Amgen to Cut Jobs, a First for the Biotech Giant”

The Benton Crier: “Amgen to cut up to 2,600 jobs”

Associated Content: “Biotech Firm Amgen Announces Layoffs”

A recent article in The Boston Globe highlights some developments with the Danversport Trust, started on June 1, 2007 when it was approved by Judge John Casey. The trust has been established as a means for those who were effected by the November 2006 warehouse explosion  (occupied by CAI, Inc. and Arnel Co.) to “negotiate a group settlement against any party found responsible.” The explosion caused over $20 million in damage and displaced many families whose homes were either severely damaged or destroyed.

So far, authorities have not found either CAI or Arnel responsible for the explosion. According to officials, the explosion was most likely caused by the ignition of chemical vapors from an unknown source. Final reports have not yet been made available. Some members of the community, however, are planning to band together and hire their own team of experts to find out what really happened. One possibility is the presence of natural gas in the building structure; however, there is not yet any evidence of that.

Jan Schlichtmann, the attorney representing The Danversport Trust, says that once findings are released concerning the cause of the explosion the trust will then have a better idea of who to approach regarding settlement negotiations. “If a settlement is reached, the money would be paid into the trust” and the beneficiaries of that trust would be the property owners whose property was effected by the explosion. The trust is also accepting private donations which, thus far, exceed $7,000. Based upon the needs of each beneficiary (so far there are over 200, including minor children), the money in the trust will be distributed under a benefits plan, with some money also being used “for the long-term improvement of Danversport.”

While some property owners have already reached monetary settlements with their insurance companies, a great number of them have yet to return to their homes and businesses. Out of 70 homes and businesses that were severely damaged or destroyed by the explosion, more than half of them are still being repaired and/or rebuilt.

The Boston Globe: “Victims form trust for settlement”